EMA and MACD day trading forex strategy

This is a classical day trading/trend following forex system with a modern twist. The twist comes with the use of fractals (wave structure) as a position liquidation method – trailing stop. It is adjusted in increments according to the wave structure of the market. This is an excellent method to close the trade, and it is working very well. This was proven by testing strategy on historical data since 2003.

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The system is using moving averages to determine the trend. MACD is used as a whole, to signal the entry. MACD entry at the end of the correction, is a great opportunity to consider the wave structure. We will do just this when applying trailing stop at last closed fractal (price).

 

The strategy was tested on historical data since 2003 and it comes with free expert advisor. Provided by theforexkings.com

 

Used tools and indicators

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Exponential moving averages (EMA200, 100). Two moving averages are used to determine the main trend. This solution is definitely not perfect. The idea is to get some edge in our entry and it works well with this setup.

 

Moving average convergence divergence (MACD12, 26, 9) MACD is a timing tool used for our signal in this trading system. It has a solid success rate in finding end of a correction (wave) going against the main trend. This great entry opportunity is exploited by this system.

 

Fractal based Trailing stop (90 pips extra distance for trail stop). TS is placed at last closed fractal marked price. It can be adjusted only in the direction of winning trade.

 

Forex strategy rules

SELL

EMA slow trending above EMA fast. Downtrend.

 

MACD histogram trending above zero value. Once it falls below red dotted signal line, we enter the trade on candle close.

Trailing stop is placed at last closed upper fractal. For better results we add extra distance to the price marked by it (90+pips).

 

BUY

EMA slow trending below EMA fast. Uptrend.

 

MACD histogram trending below zero value. Once it rises above red dotted signal line, we enter the trade on candle close.

Trailing stop is placed at last closed lower fractal. For better results we deduct extra distance from the price marked by it (90-pips).

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Disclaimer:  Expert advisor was tested for profitability on historical data. All screen shots provided are displaying real results of the test. However past data will never guarantee future success. Every expert advisor needs to be tested properly on demo account. LIVE use only on your own risk. Read full disclaimer. TheForexKings Team does not give any financial advice. TheForexKings does not take any responsibility for any user’s investments and investment decisions. All rights reserved. Strictly for personal use.

 

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“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

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